In a recent article I wondered whether CEO Magnus René’s decision to leave the company was the result of the company’s failure to introduce high profile new products over the last year or other conflicts arising following the acquisition by GE. Mr. René kindly agreed to discuss these issues clarifying that business has never been better at the company and that he chose to leave only because he felt his cycle was complete, after bringing Arcam from a startup to a major global player.
“The actual situation is very different. I’ve been with the company for 15 years – he explained – my task was to commercialize the technology and the company and we did that, all the way to selling the company to GE. Over the last year, we’ve been working together to get the company into this new asset. One of the latest achievement is that we raised a billion SEK for the company. We now have a great management team, a lot of cash and a stable ownership situation. It’s just a good time to leave. There are no conflicts whatsoever inside the company.”
It all started from a recent post that appeared on LinkedIn (and was later erased) asking if AM industry rising star company Arcam AB may be headed toward an unexpected, early demise. The reasons for these conclusions were indicated as the fact that the company has not any new products since acquisition by GE and – unlike Concept Laser, also taken over by GE in 2015 – it has not outlined a clear vision for future growth and evolution of its technologies. Most of all though, the post explained that the original EBM patent is due to expire next year and that the Swedish company’s ongoing technological leadership may come under attack.
“The EBM patents are far from reaching maturity. The misunderstanding may arise from the fact that we were founded twenty years ago in 1997, however, most of our patents were registered much later,” Mr René explained. “Our most important patents are just over ten years old. There is no single EBM patent but we actually a number of patents for processes that are all far from maturing. I don’t think we have any patent that will mature next year.”
While the post was erased and is now impossible to find, it should be said that, in spite of a reassessment of its DTI medical division, Arcam seems to be doing just fine. Stocks are near an all-time high, valued above $315, and their count was increased by more than 4.1 million last November 30th (which is what Mr René was referring to when he spoke about the significant capital increase from the current ownership).
Most major metal AM system manufacturers, however, have outlined a clear vision for increased process automation and workflow integration and Arcam – to this date – has not. Which is particularly odd, since its technology is perhaps the most ready for serial part production. The company’s business remains solid and perhaps there is no point in getting too much ahead of the curve.
Mr René explained that this is more of a communication issue than a real issue. “This has always been our policy. We generally focus on the preset and never anticipate communication on future plans. Behind closed doors, with specific customers, we may talk about plans and about what is going to happen with the next generation of hardware systems but we don’t talk about it in the public sphere until the products are actually ready for commercialization.” It thus seems safe to assume that Arcam is actually already working on the next generation of EBM systems which – as Mr- René had explained in this interview from 2015 – will likely focus on larger build capabilities and integration of new alloys.
Magnus René has been CEO of Arcam since 2001 and Johan Brandt has been CFO of the Company since 2012. Magnus René has a notice period of 6 months and will remain in his position until a new CEO is appointed or at the latest until June 3, 2018. Johan Brandt has a notice period of 3 months and will remain in his position until a new CFO is appointed or at the latest until April 30, 2018.
“Magnus René has with energy and decisiveness built Arcam to a leading company in the Additive Manufacturing sector. He has together with his team, customers and partners worldwide developed the company from a start-up to a global industry. Magnus has also been instrumental in bringing Arcam into its new future with GE as an owner”, says Göran Malm, Chairman of Arcam, and continues; “Johan Brandt has, as CFO and deputy CEO, built the structure of the company and thereby facilitated our growth and globalization. Johan has with his leadership and his team developed first class management of Arcam’s and our subsidiaries financial functions”
It seems that Mr. René considers his own professional experience at Arcam to have reached its natural conclusion and that he could no longer help the company scale up beyond this point. This may lead back to the earlier assumption that Arcam has somewhat fallen short in terms of innovating its AM technology since the GE acquisition took place.
“I have had a fantastic journey, being part of the team building Arcam during those 16 years. Today, Arcam is well positioned, with a great team, world-class products, strong leadership in our companies and a strong cash position after the recently concluded share issue. With GE as majority owner this is a good time for me to move on and for a new CEO to take over and develop the company in the new environment”, he said.
*This post was originally published on 12/6 and updated on 12/8 to include Mr. René’s comments.